CME Group Inc. (CME) Earnings

Management highlights

### Core Market Performance - Q2 2026 average daily volume was 29.8 million contracts, the second highest Q2 volume in company history, within 1% of the 2025 Q2 record. Volume was particularly strong in May and June after a tough April comparison. - Open interest increased 8% YoY and 16% quarter-to-date at the end of Q2, reaching new record levels for large open interest holders across interest rates, equity indexes, and foreign exchange in 2026. - The company delivers an average of over $95 billion in daily margin capital savings for customers. - H1 2026 cumulative volume is 10% higher than H1 2025, revenue is up 8% YoY, and adjusted diluted earnings per share is up 10% YoY. July 2026 volume to date is tracking 18% higher than July 2025. - Adjusted net income for Q2 2026 was $1.1 billion, with an adjusted net income margin of 63.4%. Adjusted diluted EPS was $2.99, up 1% YoY. The company returned $1.2 billion to shareholders in Q2, including $468 million in dividends and $695 million in share repurchases. ### Position on Perpetual Futures - Management notes that perpetual futures are structured as leveraged spot products with frequent funding rate adjustments, high leverage, automated liquidations, and limited investor protections, making them inappropriate for core institutional risk management clients. - Perpetual futures do not deliver price or time certainty, which are required for effective hedging, and total all-in trading costs are typically orders of magnitude higher than CME's standard listed futures. - CME has full operational and technical capability to launch perpetual futures if customer demand evolves, but has not received demand for these products from its core top-tier institutional clients across all asset classes. - Management confirms that existing CME crypto futures have grown seven-fold in volume over the past three years despite the longstanding availability of crypto perpetuals, because CME contracts fill an unmet institutional hedging need. ### Upcoming Product Launches & Innovation - 24-7 trading for CME crypto futures successfully launched in Q2 2026, and 24-7 trading for the 1-ounce gold contract launched on the weekend after the call. - Single stock futures are scheduled to launch next week, targeting growing demand for equity risk management tools, with 35+ retail partners ready for day-one trading. - Treasury Link, an industry-first product connecting CME U.S. Treasury futures and cash Treasury liquidity pools for atomic spread trading, is scheduled to launch in Q4 2026. - Compute futures, developed in partnership with Silicon Data, will launch later in 2026 as the first benchmark futures contract for GPU compute rental costs, serving AI labs, cloud providers, data centers, and asset managers. ### Market Integrity & Strategic Focus - Management remains committed to preserving market integrity and investor protections, and will not sacrifice core standards for the sake of innovation. The company prioritizes launching products that meet demonstrated client demand, particularly from its core institutional base.

Guidance

- Management did not issue explicit numerical revenue or earnings guidance for full year 2026, but reaffirmed that the company's robust product pipeline, strong H1 2026 performance, and ongoing technology investments position the firm to deliver continued growth and shareholder value. - Management expects the new product pipeline (single stock futures, Treasury Link, compute futures) to accelerate revenue and volume growth through the second half of 2026 and beyond. - Continued double-digit YoY growth in market data revenue is expected to persist, driven by a multi-pronged strategy of expanding professional subscriptions, growing derived data and performance-based revenue streams, and incubating new retail traders through simulation environments. Non-recurring catch-up payments will continue to fluctuate quarter-to-quarter.

Segment performance

Overall revenue for Q2 2026 was a record $1.7 billion, up 1% year-over-year (YoY) and the second highest all-time quarterly revenue behind Q1 2026. - Market Data: Revenue reached a new record of $238 million, up 20% YoY, contributing approximately 14% of total Q2 revenue. This marked 33 consecutive quarters of YoY growth and 8 consecutive quarters of record revenue. Strong drivers include professional subscriber growth (3.5% quarter-over-quarter), expanding derived data business, 56% YoY growth in performance-based simulation training accounts, and $7 million in non-recurring audit/catch-up payments from prior periods. - Cryptocurrency: CME crypto futures and options volume grew 40% YoY in Q2 2026, with average daily notional volume between $4.5 billion and $6.5 billion, and average daily open interest between $9 billion and $10 billion for June-July 2026. This is far larger than competing recently launched U.S. crypto perpetual products, which reached ~$270 million daily volume and ~$10 million open interest in July 2026. - Equities: Q2 2026 average daily volume (ADV) reached 8.6 million contracts, up 13% YoY, with June ADV of 10.1 million contracts up 54% YoY. July 2026 ADV is tracking up 40-50% YoY. Open interest for equity products has hit new records in 2026. - Metals: 2026 year-to-date copper volumes are up 4% YoY, with just under 700,000 short tons of physical copper held in COMEX warehouses, a new record, supported by U.S. onshoring and supply chain initiatives for critical minerals. Q2 2026 was the second best second quarter on record for metals revenue and volume. - Energy: Open interest has hit new records in 2026, with strong institutional demand for standard CME energy futures contracts. - Interest Rates: Open interest has hit new records in 2026. Foreign exchange also saw record large open interest holder levels in 2026. CME Group generates 94% of its total volume from institutional customers, with retail making up the remaining 6% as of H1 2026.

Risks & headwinds

- Perpetual futures, particularly if launched for large equity indexes, pose meaningful systemic risk: the automated liquidation structure and dynamic funding rate model of existing perpetual designs could create cascading liquidation events in large, systemically important markets, with broad impacts on U.S. and global equities. - Regulatory risk: The CFTC issued a stay on CME's self-certified 24-7 small crude oil contract ahead of launch, despite approving non-economic 40.2 self-certified prediction contracts, creating uncertainty around the regulatory approval timeline for innovative, commercially focused CME products. Ongoing litigation with the CFTC over the classification of perpetual futures is moving through the courts, with the CFTC's response due in August 2026, and no clear near-term resolution timeline. - Vertically integrated competitor models that own both customer relationships and trading venues create potential perceived conflicts of interest that could damage market participant trust, though CME has prepped its own FCM capability to remain competitive if this structural trend continues. - General market uncertainty could increase demand for CME's risk management tools, but also creates volatility in volume and revenue that could deviate from current expectations.

Analyst Q&A

• Q: Dan Fannin (Jefferies) asked Terry Duffy to expand on customer demand for perpetual futures across asset classes, given widespread market focus on the product. /

  A: Duffy confirmed he personally spoke to C-suite leaders of top-tier institutional clients across all major asset classes, including the world's largest commercial energy firms. All core institutional clients stated they do not want perpetual futures, as the product structure cannot support their core risk management hedging needs. Duffy reaffirmed CME is technically prepared to launch perpetuals if demand changes, but currently sees no customer support for the product from the firms that make up 94% of CME volume.

• Q: Chris Allen (KBW) asked for details on customer demand and differentiation for the upcoming compute futures product. /

  A: Management explained compute futures address an unmet need for risk management around AI and data center compute costs, which currently have no public price discovery mechanism. CME's contract will track daily spot rental prices for 100 GPUs via a benchmark compiled by partner Silicon Data, allowing data centers, AI labs, cloud providers, and asset managers to hedge procurement costs and enable financing. The product fits naturally alongside CME's existing commodity portfolio (copper, natural gas, power) that already serves data center operators.

• Q: Patrick Moley (Piper Sandler) asked why the CFTC stayed CME's 24-7 crude contract but approved 24-7 gold, and what this implies for perpetual futures regulatory approval. /

  A: Duffy noted CME filed both self-certification (40.2) and full review (40.3) for the small crude contract, which is an existing contract only adjusted for smaller size, so CME viewed self-certification as legally appropriate. He expressed surprise at the stay, pointing out that CFTC allowed a non-commercial 40.2 self-certified hot dog eating contest prediction contract to launch without issue. Duffy stated the decision highlighted inconsistent regulatory prioritization of commercially meaningful products, but did not draw a direct read-through to perpetual futures policy.

• Q: Brian Bedell (Deutsche Bank) asked about systemic risk of CFTC-approved equity index perpetual futures, and CME's exclusivity for S&P index products. /

  A: Duffy confirmed that perp contracts are legally swaps (not futures) under Dodd-Frank, due to their recurring funding rate structure. If a large equity index perp were approved under the existing crypto perp design, it would pose substantial systemic risk, because cascading automated liquidations could destabilize the entire U.S. equity market. Duffy also noted CME holds exclusive rights to list S&P, Dow Jones, NASDAQ, and Russell index derivatives, so CME would be the only possible issuer of a U.S. listed equity index perpetual if one were ever approved.

• Q: Alex Blasting (Goldman Sachs) asked why single stock futures will succeed now after the product failed in its 2000 launch, and what retail partnerships are in place. /

  A: Management explained that market conditions are far different now: equity index valuations are much higher, creating widespread demand for single-stock level hedging tools, and CME's existing equity complex is already experiencing rapid volume growth (up 13% YoY in Q2). 35 of the largest global retail brokers are ready for day-one trading, with retail brokers calling single stock futures their top retail growth catalyst for 2026. The product will launch with 22 major single names, financially settled, and paired with CME's existing capital efficiency benefits.